1951-05-16

[Stage Direction]
Mr. G. T. Fulford (Leeds) presented the first report of the special committee on the Dominion Elections Act, 1938, and amendments thereto, and moved that the report be concurred in.
Motion agreed to.


Mr. J. H. Harris (Danforlh):: Mr. Speaker,
I rise on a question of privilege. I have had a communication from my constituents who are very much concerned about the present world situation, and particularly the situation here in Canada. They feel that our time here is not being properly occupied, when for two, three or four nights we use the services of this highest court in the land to discuss matters which concern perhaps two or three or four hundred individuals, regarding their marital relationship, when we could be discussing matters of great concern to the 14 million people in Canada. They have asked me, and I ask through you, sir, whether the government would not give some consideration to calling in the law officers of the crown and others who may be required in order that we may cut some of the red tape which is holding up the proceedings of this chamber at this time of stress and strain in the minds and hearts of all our people.
It does not matter if we have to stay here until Christmas; let us divorce ourselves for another year or two from the bills to which I refer and get down to the hard facts of cold-blooded business so far as Canada is concerned.
My specific point of privilege, Mr. Speaker, is to ask those charged with responsibility, and all the help that they have around them here, there and beyond, and some over on this side, to get together and slash some of this red tape so that we may get on with the business of Canada.



NORTH FRASER HARBOUR COMMISSION


Hon. Lionel Chevrier (Minister of Transport) moved: for leave to introduce Bill No. 292, to amend the North Fraser Harbour Commissioners Act.


Mr. Green:: Will the minister give an explanation?


Lionel Chevrier: The object of the bill is to amend the North Fraser Harbour Commissioners Act so as to provide for additional representation on the board by means of two commissioners appointed by the governor in council, and also to provide for the payment of the remuneration of the commissioners out of harbour dues.
Motion agreed to and bill read the first time.



QUESTIONS


NATIONAL PHYSICAL FITNESS ACT


Mr. Balcom:: 1.	Has an agreement recently been entered into between the federal government and the province of Nova Scotia in respect to the National Physical Fitness Act?
2.	If so. on what date, and what are the terms?


Mr. Martin:: 1.	Yes.
2.	Agreement date, March 30, 1951; ratified by order in council P.C. 1930 of April 18, 1951. The terms are as follows:
"1. The province will at all times during the currency of this agreement, through the organization, co-operate with the national council on physical fitness in promoting the physical fitness of the people of the province of Nova Scotia.
2.	The province will during the currency of this agreement develop the physical fitness plan, which has been approved by the minister, with such supervision in the performance thereof as the minister may require.
3.	The province will as soon as practicable after the 1st day of April, 1952, submit to the minister evidence satisfactory to him:
(a)	that the province has during the fiscal year 1951-52 carried out its obligations under this agreement; and

Questions
(b)	of the amount actually expended by the province during such fiscal year in developing the physical fitness plan hereinbefore referred to.
4.	The dominion will, if the province carries out its obligations under this agreement and produces evidence thereof, as provided in paragraph 3 hereof, pay to the province within three months of the production of such evidence, out of the national physical fitness fund, to the extent of moneys therein or appropriated by parliament therefor, either one-half of the moneys actually expended by the province during the fiscal year 1951-52 in carrying out its said physical fitness plan, or the sum of $11,301.75, whichever is the lesser.
5.	This agreement shall come into force on the first day of April, 1951, and shall terminate on the 31st day of March, 1952."



R.C.M.P. VESSEL MP-30

Mr. Gagnon:: 1.	What waters are patrolled by the R.C.M.P. vessel MP-30?
2.	How many persons make up the crew?
3.	What have been the operating expenses for each year since the said vessel was put into operation?
4.	How many seizures of contraband goods were made each year?
5.	What is the total value of such seizures?
6.	What duties are performed in this connection?


Mr. Garson:: 1.	The R.C.M.P. vessel MP-30 is known as the Fort Pitt, and is based at Bagotville, P.Q., during the season of navigation and carries out patrols in the Saguenay river. The patrols are mostly confined to the Port Alfred and Chicoutimi area.
2.	Sixteen.
3.	This vessel commenced operations on June 8, 1949. Expenses for year ended March 31, 1949, $17,914.78; expenses for year ended March 31, 1950, $31,300.34.
4.	1949, 70 seizures; 1950, 57 seizures; 1951 to date, 2 seizures.
5.	Approximately $1,813, based on value for duty of seized smuggled goods before Canadian duties and taxes are applied. In addition, fourteen vessels were seized for having on board dutiable goods unreported at customs; these vessels were released on penalties totalling $1,275, subject to final decision by the Department of National Revenue.
6.	The enforcement of the Customs Act involving the search of deep-sea vessels and the seizure of any dutiable goods which have not been reported to customs, as required by the act. During the season 1949, 775 vessels

called at Port Alfred, and approximately 300 of these were 10,000 ton ships direct from foreign ports.



HEALTH GRANTS


Mr. Mallais:: 1.	Since 1945, has the Department of National Health and Welfare made any grants or given any subsidy to St. Anne's hospital at Baie St. Paul, county of Charlevoix, province of Quebec? If so, how much per annum?
2.	Since the said year, has the department made an annual grant or defrayed in part the fees of a physician attached to the above-mentioned hospital? If so, what is the amount of such contribution?


Mr. Martin:: 1. Yes.
(a)	Grant for the purchase of
scientific equipment	 $15,895.50
(b)	Grant for the training of the
medical superintendent of the hospital and hospital technicians	 2,550.00
Total 1949-50	 $18,445.50
(a)	Grant for training of technicians	 $ 1,800.00
(b)	Grant for purchase of
laboratory supplies	 500.00
(c)	Grant for the employment of
a part-time assistant
physician	   2,000.00
Total 1950-51	 $ 4,300.00
(a)	Grant for the purchase of
laboratory equipment and supplies	 $ 767.23
(b)	Grant for the training of
hospital technicians		3,600.00
(c)	Grant for the employment of
a part-time assistant
physician	 2,000.00
Total 1951-52	 $ 6,367.23
2. Yes. See item (c) above for the years 1950-51 and 1951-52.



USE OF SODIUM FLUORIDE IN PUBLIC WATER SUPPLIES

Mr. Bradetie:: Is any action being taken by the Department of National Health and Welfare with respect to the use of sodium fluoride in public water supplies to prevent tooth decay?


Mr. Marlin:: The dental health division of the Department of National Health and Welfare is conducting, in collaboration with the provincial department of health 'and the city of Brantford, a well-controlled study of the dental effects of sodium fluoride. The division examines periodically 1,800 school children at Brantford, Ontario, where, since 1945, the local health authorities have been adding fluorine to the water supplies. For purposes of comparison 1,800 children are also being periodically examined by the dental health division at Sarnia, a fluorine-free community.



QUESTIONS PASSED AS ORDERS FOR RETURNS


DEPARTMENT OF TRANSPORT


Mr. Fulton:: 1.	What was the total paid by the Department of Transport for professional and special services in the fiscal year 1950-51?
2.	What person, persons, firms or companies received payments of $25,000 or more under this heading in the said year, what was the actual amount of each payment, and for what service was the payment made in each case?



DEPARTMENT OF NATIONAL REVENUE


Mr. Fulton:: 1.	What was the total paid by the Department of National Revenue for professional and special services in the fiscal year 1950-51?
2.	What person, persons, firms or companies received payments of $10,000 or more under this heading in the said year, what was the actual amount of each payment, and for what service was the payment made in each case?



MOTION FOR PAPERS


Mr. Hodgson:: For a statement showing the total expenses paid during the fiscal year ending March 31, 1951, to each (a) member of the cabinet; (b) parliamentary assistant.



ARTS, LETTERS AND SCIENCES INQUIRY AS TO TABLING OF REPORT OF ROYAL COMMISSION

[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, on April 26 last I asked the Prime Minister about the probable date of the tabling of the report of the royal commission on arts, letters and sciences. He stated, as it is set out at page 2398 of Hansard, that the latest information was that the government might not have the report until about May 14.
Inquiries of the Ministry It is now past that date. Is there any further information the Prime Minister can give us?


Right Hon. L. S. St. Laurent (Prime Minister):: I have communicated not only with the secretariat of the royal commission but also with the chairman and one other of the commissioners, and they are as much embarrassed as I. am by the fact that the report has not yet been received. They are doing their best to expedite the printing. They appreciate the fact that there are many hon. members who are as anxious as the hon. member for Eglinton to have the report.
I was told that the printing of the French version had now caught up with the printing of the English version, and that there was not going to be any additional delay because of any disparity in the dates when the two versions are ready. I can assure the hon. member that I am told by the secretariat-and this is confirmed by the chairman and one other commissioner to whom I talked about it- that everything possible is being done to expedite the matter.


Donald Methuen Fleming: Has the government yet seen the report?


Mr.   Si. Laureni@: The government has not seen the report. The commission recommended, and the government acquiesced in their recommendation, that they would themselves attend to the printing of the report, and that it would not be available even to the government until it was available for immediate distribution after it had been handed to His Excellency.



REQUEST FOR REVIEW OF CEILING PRICE UNDER INTERNATIONAL AGREEMENT

[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. In view of rising costs of production and an increasing world price level, has the government made any attempt to have reviewed the present ceiling price under the international wheat agreement?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: The international wheat agreement is an agreement among some forty governments. It is now in its second year of operation, and the only action Canada -could take to vary its terms would be to denounce it. Canada has no intention of denouncing it, nor has it any desire to do so.


Hazen Robert Argue: Could the minister not say whether any effort has been made to call in the countries and to talk it over?
3078	HOUSE OF
Inquiries of the Ministry


Mr. Diefenbaker:: Without there being any repudiation of the international wheat agreement, could not the government give consideration to communicating with the signatories to the agreement with a view to a revision in prices, having regard to increased costs?


Clarence Decatur Howe: There are three producing countries involved in the agreement, and at least thirty-seven consuming countries. My hon. friend is optimistic if he thinks that the wishes of the three would prevail against the wishes of the thirty-seven. I presume that the signatories to the agreement would have equal standing in the agreement.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Howard Charles Green: Mr. Speaker, yesterday the Minister of Transport undertook to make inquiries concerning the postponement of the general freight rates inquiry by the board of transport commissioners. Is he in a position to make a statement in the matter now?


Lionel Chevrier: Following the inquiry of the hon.
member I asked the chairman of the board of transport commissioners to give me a report as to what happened. I am informed that counsel for the Canadian National Railways and the Canadian Pacific Railway Company stated that the railways' studies on equalization of freight rates had not been completed, that the recommendations of the royal commission on transportation as to equalization differ in important respects from the plan on which the railways' studies were based, and that the extent to which the recommendations of the royal commission are to be implemented by legislation and the extent to which new studies and changes in the railways' plan will be required will not be known until legislation is introduced. Counsel for the provinces represented before the board urged an adjournment to enable the provinces to see the proposed legislation. The board adjourned the matter to September 10, 1951, and directed the railways to file, not later than August 20, 1951, six copies of their plan for equalization with the board and the provinces appearing in the matter.
The hon. member also asked as to the present position of the application by the Railway Association of Canada for freight rate increases. The position there, as reported to me by the chairman of the board, 

is that the date fixed for the hearing of the application is June 11, 1951, and that no request for an adjournment has been made.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Mr. G. F. Higgins (St. John's East):: Mr. Speaker, I should like to direct a question to the Secretary of State. On Wednesday, February 21, I asked whether any application had been made by the government of Newfoundland for an economic survey, and if so what action had been taken. My question was passed as an order for return. This was almost three months ago. I should like to know when I may expect the return.



LAURIER HOUSE


Louis Stephen St-Laurent: the second reading of Bill No. 289, respecting Laurier house.


Mr. Fulton:: I wonder if the Prime Minister has anything further to say at this time?


Louis Stephen St-Laurent: No, I have not. I shall be prepared at the committee stage to answer such questions as are asked and as I can answer.


Edmund Davie Fulton: Mr. Speaker, there are a few remarks that I think should be made at this stage of the bill. I am sure that no one will be disposed to object to any generosity shown by the late Mr. King to the people of Canada. Indeed I think everyone will be inclined not only to agree that the financial objects of his will are praiseworthy, but also to confirm the general sentiments and objectives that he himself expressed, that although he had done much for this nation, it too had done much for him and had been generous to him, and that it was fitting that he should make some gift to the nation which had elevated him for so long to the office of first citizen and done so much for him while he occupied that office. I am sure we shall all agree that that was a worthy and proper motive.
But such enthusiasm as we may have for this proposal should not blind us to the realization that it is not likely to be carried out without some considerable expense to the taxpayer. After all, we have but recently had under consideration a project for a house for the present and future prime ministers which was approved by parliament on the

basis of one estimate, but which was realized only at a cost to the taxpayers of well over $500,000 more than the amount first indicated. I think we should beware lest this project in connection with the home of a past prime minister should also cost the taxpayers vastly more than is at first indicated.
The right hon. gentleman who is the leader of the present government, in the answer he gave to my question yesterday, said that the sum provided under the will of the late Mr. King will not be sufficient to carry out the full cost of his monument, and that the public treasury is to be diminished also to bear the cost of bringing to their full fruition Mr. King's bequest and his ideas as to how his house should be used. Therefore we should make some inquiries as to how the project is to be administered and how much the annual cost to the taxpayer will be.
I should like the Prime Minister to indicate, if he will, just how this cost is to be met. Will it be met by way of an annual item in the estimates under the federal district commission, or under the dominion archives?
I think we should receive further particulars when in committee. We shall have an opportunity to ask questions at that time. I should like to know what the estimated cost of the alterations is. What staff will be necessary to operate the research centre? What will be the cost of acquiring and installing and storing the various historical materials? These are subjects to which our minds should be directed, so that we may know how much the actual bequest of cash made by the late Mr. King will fall short of the requirements necessary to carry out the project envisaged in this bill.


Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, I should like to add just a word to what the hon. member for Kamloops (Mr. Fulton) has said. As the hon. member has stated, there are two aspects of this matter. The first is the gift to the people of Canada, which we respect and welcome, and the other is the expenditure of money by the people of Canada, in connection with which I think we should be fully informed.
(Translation):


Mr. J. A. Bonnier (St. Henry):: Mr. Speaker, I wish to make a few remarks on the bill which deals with the home of the late Right Hon. W. L. Mackenzie King. That house was left to him by Sir Wilfrid Laurier and Mr. King himself bequeathed it to the government just as he had previously given his summer cottage at Kingsmere. He also willed a few hundred thousand dollars to be spent on the upkeep of these properties, something the leaders of the Conservative party at that 80709-197
Laurier House
time unfortunately never did. It is unfortunate that former leaders of the Conservative party did not show the same generosity on their departure. The Right Hon. Mr. Bennett went to Europe and left his money to England instead of to Canada. That is the difference * between the two parties. They were led by two bachelors; one of them was attached to his country while the other was not.
(Text):


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-Short title.
Mr. Coldwell:: Is the Minister of Public Works in a position to make any estimate as to what it will cost to put this house in proper repair? As I suggested yesterday, I do not think that any very expensive work is required on the outside of the building. If my reading of the portion of the will which was placed on the record by the Prime Minister is correct, I think it was the late prime minister's desire that the interior of the house should remain pretty much as it is now. That is to say, it would not need a great deal of expenditure on structural alterations as was the case with the new residence of the Prime Minister.
Perhaps the Minister of Public Works could give us some information that would be useful in the light of the suggestion made a few minutes ago by the hon. member for Kamloops. Can the minister indicate approximately what it is proposed to do, and what the cost will be? I do not think a very large outlay is needed at the present time.


Mr. Fournier (Hull):: Mr. Chairman, I must admit that after looking through the bill I would assume that our duties with respect to Laurier house will be to maintain it in a good state of repair. We have not visited the place to make an estimate as to what is actually needed, but as it is an old building I am sure we shall have to spend money every year to maintain it in a good state of repair.


Edmund Davie Fulton: I am interested in this question, as I know many other hon. members are. As the hon. member for Greenwood has said, the matter is approachable from two angles. First there is the gift to the nation. So far as that is concerned, it is welcome. But there is also the question of the upkeep or expense to the nation which may be involved in carrying out the terms of this bequest. We have had experience recently in embarking on projects in connection with houses without knowing what the total cost was going to be, and then having the unpleasant shock, which has given rise to unpleasantness all

Laurier House
round, of finding that the cost 'has greatly exceeded what we were led to believe at first would be the approximate figure. I can hardly credit the fact that the government would actually be introducing legislation to go ahead and set up this project without some estimate of the cost which will be involved. I think the Minister of Public Works said that they had not looked into it at all, that they do not know what the cost will be. I am certain that the minister would not wish to make that approach to legislation. I hope I misunderstood him. I hope I misinterpreted him, and I trust there is some plan of the way in which the project is to be administered. I should like to ask the Minister of Public Works whether any plan has yet been made and any estimate prepared of any structural alterations, either interior or exterior, to place the house in such a condition that it can fulfil the terms of the bequest.


Alphonse Fournier: If I understand correctly our position under this measure, it is to maintain the house in a good state of repair. We will consider Laurier house in the same way as we consider other public buildings in Ottawa belonging to the federal government. Estimates will come before the house. If the repairs are minor in character, the cost will be taken out of the general vote. They will be examined by the treasury board, and reported in the Auditor General's report. If they are extensive repairs to the building, there will be a special estimate. I intend to wait to see in what condition the house is. Before going into this property we had to accept ownership of it. This having been done not long ago, I did not think it was my duty to interfere with the property and have estimates prepared in advance of the bill, so I am not in a position to give the amount to be expended nor to go into the details.


Edmund Davie Fulton: Perhaps we have a fundamentally different approach to this problem.


Alphonse Fournier: That of course does happen.


Edmund Davie Fulton: Based on past experience, however, I think we should be more careful. Are we to take it from the reply the minister has made that no preliminary inspection has been made of the house, and that no preliminary plans have been drawn up or any preliminary decision made as to whether it will even be necessary to effect any structural alteration either to the interior or to the exterior of the building to place it in such a condition that it can fulfil the purpose of the bequest? Have any such preliminary inspections or plans been made?


Alphonse Fournier: Mr. Chairman, probably the house will have to be redecorated, and we shall have to do some work on the exterior. We are not going to change Laurier house into another kind of structure, or enlarge it. We are going to try to keep it the way it is, in order that it may be the memorial it is intended to be. As to the expense, I will invite my good friend to my office some morning and we will look into all the details. We will go over the rooms and get some expert to give the hon. member the exact amount needed to do the necessary work.


Edmund Davie Fulton: I can assure the minister I shall be pleased to accept his invitation whenever it is extended, but I think it might have been more timely if the invitation had been extended before the bill was introduced rather than after, so that we could have had that information before us. I should like to ask the minister a further question. What staff will be necessary to operate the research centre under the dominion archivist when the scheme is operating?


Louis Stephen St-Laurent: There has has been no preliminary plan made as to that. The will was communicated to the government. The government felt it was proper to accept the bequest, and that it was proper to come before parliament and recommend that the dominion archivist be put in charge of Laurier house, and that he be assisted by a curator to conserve the property. I know that up to the present time there has been some preliminary inspection, and I am told that something is being done about some bit of electric wiring in the house which, for the safety of the premises, should be attended to. I was told that was all that was required as a matter of urgency. There has been no plan determined. As a matter of fact the inventory of the contents of the house to be turned over by the executors to the government has not yet been completed. It is still in process.
The title to the real estate was conveyed to the government as of the first of January, but there is a representative of the executors still on the premises, and, together with Mr. Handy, who is a civil servant and was Mr. King's private secretary, he is drawing up the inventory of contents which will remain a part of the property. The executors and Mr. Handy did look over the house to see if there was anything urgently required for its preservation. I was informed that all that was urgently required-and it was being attended to-was some bit of wiring in the electric lighting system that might have constituted a danger.

With respect to the manner in which the house will be used, that will depend upon what is subsequently determined. I think the dominion archivist is a gentleman who enjoys the confidence of all Canadian students, and I think that Canadian students and the Canadian public will be satisfied that he will not recommend anything in the way of facilities to be provided to students that would not be worth what it is going to cost the country. This bill is the preliminary step. The suggestion that is being made is that Laurier house be heated and maintained by the Department of Public Works, that the dominion archivist be in control, and that he have a curator under him to look after the place.
A question has been asked as to when the house is to be open to the public. I was told recently on behalf of the executors that they did not think it could be opened to the public until quite late this summer, that they are still proceeding with their sorting out of the contents of the house, and that it is not possible to be specific about that matter.
With respect to the grounds, the recommendation is that they be maintained as a part of the parkway system that the federal district commission maintains in Ottawa. Whenever anything is required that will be beyond the cost of the ordinary upkeep, there will have to be an appropriation by parliament. There will have to be a recommendation to parliament, at which time the plans and details will be communicated to parliament. Unless parliament is going to say this bequest should not be accepted, it is necessary to proceed in this gradual fashion and not attempt to communicate to parliament any suggestions at this time as to what would be the best way to take advantage of this property as a research facility for students, but to obtain the considered recommendation of the dominion archivist. That is what the government plans to do.


Edmund Davie Fulton: From the remarks of the Prime Minister I understand that title to the property already has been transferred under the will to the government?


Louis Stephen St-Laurent: Yes, but of course that is subject to repudiation by parliament, if parliament sees fit to do so. The government felt that parliament would not wish to repudiate it.


Edmund Davie Fulton: I wanted the question of
ownership established, as it now has been, because obviously it was not necessary, in order to convey the property, that this legislation be passed. The Prime Minister has said that the property was conveyed and title taken even before the introduction of this 80709-197J
Laurier House
legislation. Therefore, for myself at any rate, I express regret that the government has seen fit to introduce legislation asking parliament to accept the full principle of maintaining and administering this property before the completion of the preliminary surveys to which reference has been made. According to the statements of the Prime Minister and the Minister of Public Works, it is only after those surveys have been completed that the government will be in a position to indicate to the house their plans for the administration of the bequest and some idea of the cost of that administration. The position at the moment is that we are being asked to accept this legislation without any minister opposite being able to tell us the detailed or even the general plans for the administration of the project, or any idea of what the cost may be. I regret exceedingly that this course was followed, and that the legislation was not deferred until the government were in a position to enlighten the house.


Mr. Cruickshank:: May I ask the Minister of Public Works whether important committees such as those selecting Rhodes scholars will be permitted to use this property for research work?


Mr. Browne (St. John's West):: I should
like to ask the Prime Minister whether the public archivist was consulted before the government decided to accept the bequest.


Louis Stephen St-Laurent: The public archivist was not consulted, but the public archivist knew of the terms of the will. He knew that it was the intention of the government to ask parliament to make him responsible for the custody of the house.


William Joseph Browne: I am speaking of the practicality of the scheme. Did he approve that?


Louis Stephen St-Laurent: Will the hon. member
please repeat his question?


William Joseph Browne: Was the
public archivist consulted about the feasibility of carrying out the intentions of the testator?


Louis Stephen St-Laurent: No, he was not. It was
taken for granted that it would be feasible.


[Stage Direction]
Section agreed to.
Sections 2 to 5 inclusive agreed to.
Schedules agreed to.
Preamble agreed to.
Title agreed to.
The Deputy Chairman:: Shall I report the
bill?

Kingsmere Park


Some hon. Members:: On division.
Bill reported, read the third time and passed.



KINGSMERE PARK


Louis Stephen St-Laurent: the second reading of Bill No. 290, respecting Kingsmere park.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
Section 1 agreed to.
On section 2-Federal district commission to administer Kingsmere park.
Louis Stephen St-Laurent: I think I should just point out with respect to this section that we are asking that the governor in council have the right to describe Kingsmere park, because, though a survey has been in progress for some time, it has not been completed. A survey was required, because while this property is all in one block it had been acquired in different parcels, and it was felt there should be a survey so we would be able to transfer to the federal district commission something described by proper metes and bounds. It is for that reason that these bills were not introduced before this. We hoped to get the survey in order to make it a schedule to the act, as it is in the case of Laurier house, but we were unable to have the survey completed. Therefore subsection 5 of section 2 will authorize the governor in council to give a proper description when he gets it from the surveyors.


[Stage Direction]
Section agreed to.
Sections 3 and 4 agreed to.
Schedule agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the bill be read the third time?


Some hon. Members:: Now.


Mr. Knowles:: By leave.


Mr.   SI Laurent moved@: the third reading of the bill.
Motion agreed and bill read the third time and passed.
[The Deputy Chairman.]



INDIAN ACT


[Stage Direction]
The house resumed, from Tuesday, May 15, consideration in committee of Bill No. 79, respecting Indians-Mr. Harris (Grey-Bruce) -Mr. Beaudoin in the chair.
On section 110-Sale of lands of enfranchised Indians.
Mr. Charlton:: Can the minister assure us that he will not see these reserves become pinpointed with white settlers? Just before adjournment last evening I made a few remarks on this section and pointed out that danger. Will the minister comment on that point?


Mr. Harris (Grey-Bruce):: We recognize that some Indians might be concerned1 about this section. Until they have read its provisions they might conclude that there could be pinpointing of reserves, as my hon. friend has termed it; 'but when this section is read along with a previous section it becomes perfectly obvious that there are several safeguards to prevent that from happening. In the first instance, land must be allotted to an Indian. That action is taken by the band council, with the approval of the minister. At a subsequent time, if he chooses to become enfranchised, he may apply to the band council and to the minister for the privilege of retaining the ownership of the land which has been allotted to him. Then there is a further safeguard that, nevertheless, he does not obtain title to that land until ten years after that date. It is true that at that point he may then sell it to anyone he chooses. This is a change from the old act, designed to meet the objections of some Indians, and in particular an objection made before the special committee by a distinguished former member of the Six Nations from Brantford, that it was unfair to the Indian that he should have land allotted to him, work on it and improve it, and that when he wants to become enfranchised-it is admittedly our policy to encourage him to do that-he should nevertheless be penalized at that point and be restrained from becoming enfranchised because he would then have to sell his land to a limited number of people, namely, the members of that particular band.
Strong representations were made before the special committee by Brigadier Martin that that was unfair. Similar representations have been made to me since that time by individual Indians. Other compassionate representations were made, one of which was that Indians, as my hon. friend1 has said, on the outskirts of a reserve might wish to

become enfranchised and one could not distinguish whether they were on or off the reserve. But it was decided to continue the provisions of the present act, which are there but which have not been used, in such a way that an Indian could become enfranchised and at the same time reside on his land on the reserve. As I say, we have built up all these safeguards; the initial allotment which must be approved by the minister and the band council, the application for enfranchisement which must be approved by the minister, the application for land which must be approved by the band council and the minister, and then the ten year waiting period. So I think under those circumstances the numbers who will take advantage of this will be small. If there are some, they should have this right.


John Alpheus Charlton: I do not think that people living off the reserve should stipulate to Indians who are living on the reserve, as in the case mentioned by the minister. I do know of an Indian who has a very good farm, but he cannot will his land to his daughters if they marry non-Indians. I know that situation has arisen several times, and it does appear to be a little bit hard on those persons. I know of one Indian who is ini that situation, and he cannot will his land to his daughters because they have all married whites. He lives north of the Grand river, as a matter of fact, bordering on white land, I suppose in certain cases it cannot be helped, but as I mentioned before, I hope it will not result in pinpointing the reserve. I do not believe the minister has ever had anyone come to him from the Six Nations council making this request.


[Stage Direction]
Section agreed to.
Sections 111 to 125 inclusive agreed to.
On the preamble.
John George Diefenbaker: Mr. Chairman, in connection with the preamble and the general substance of the bill as amended I suggest to the minister that in order to protect the rights of Indians covered by this act, no Indian should be denied recourse to the courts under the provisions of this bill. I ask the minister whether or not he would be prepared, having already taken the stand that there is no denial of recourse to the courts, to accept an amendment which reads as follows:
Nothing in this act or elsewhere shall in any way be deemed to remove, abridge or otherwise restrict the rights of Indians to full access to the courts of the land, and every Indian and every band of Indians shall have the full right to appeal to the appropriate court of the province which would otherwise have jurisdiction, from any decision of the minister hereunder.
Indian Act
I believe such a provision would be salutary in its effects. It would assure to the Indians a position of responsibility, coupled with an opportunity to preserve their rights against anything which they believed to be administrative lawlessness.
If there is one thing more than any other that I think should be assured to the Indians, it is the right to do what all the rest of us can do-to seek out the king's courts with a view to protection against what they consider to be wrongs. There would certainly be no harm to the administration of the act. The court would have no authority to review discretionary orders. The power of review would be the power to remedy wrongdoing wherever wrongdoing existed.
I make this request of the minister in the interests of the more than 100,000 Indians of this country. They should not be placed in the position of having their rights determined not in courts of law but by administrative officials or by the minister. Nothing is more important today than preserving the full rights of the individual under the law.
If my view be correct, we have in this country 125,000 native born Canadians who cannot, if injustice be done to them, seek out the king's courts for the preservation of their rights. If the minister's view be correct that the Indian has that right-I say with great deference that the Indian has no such right today under this act-then the amendment that I ask him to accept will add nothing to the rights of these people. If on the other hand my view be correct, then it will actually assure the Indian of something that over the years he has been asking for, namely, the rights that Canadian citizens and others who are not Canadians or British subjects enjoy-recourse to the king's courts.


Walter Edward Harris: Mr. Chairman,
this brings up a subject which has been a matter of considerable astonishment to the minister since he took over the administration of the Indian Act. I never knew that an Indian could not sue in the courts of Canada in the same way as any other person-


John George Diefenbaker: Against administrative
order?


Walter Edward Harris: I did not know that when I became minister of this department; I do not know it now. Indians have the right to sue in courts, and have been exercising those rights at all times that I am aware of, and nothing in the present Indian Act, or in the revised Indian Act now before the house, would abridge that right in any way. For that reason I would reject the amendment, not only because it might

Indian Act
be considered unnecessary, tout because it leaves the inference that in the present act, or in the revised act, there may be, or there may have been, an abridgement of that right.
This matter was referred to by the hon. member for Lake Centre in his speech on Bill No. 267 last summer, when he said that an Indian, or a band in Saskatchewan-I am not sure which it is now-had been refused the right to sue the crown. As he said yesterday, there was a case in Saskatchewan in which damages were assessed against the crown by a court, I think it was in 1935. He said yesterday that as a result of that judgment others had been refused a fiat since to sue the crown. Now, both after he made the speech last year and yesterday I asked for and had a search made of our records, and with the exception of one case that I have been able to find, not in Saskatchewan, but in Manitoba, we have no record whatever of a fiat having been refused. It may well be-my hon. friend said he was counsel, and of course he knows-it may well be that there have been other cases, but if he was referring to the Manitoba case, then I am quite prepared to understand the point he made. The one case in Manitoba is well known to members from that province.


John George Diefenbaker: The Sinclair case; I
know the Manitoba one.


Walter Edward Harris: In that case
there had been certain transactions over forty years ago, which gave rise to debates in this house spread over a number of years. In the end a statute was passed by parliament settling the matter, at least in the view of those who were then responsible for the government of Canada, after negotiation and some form of settlement. Ultimately when it was sought to sue the crown on the basis of the prior matters having to do with that band, a fiat was refused in 1936 because parliament had already dealt with the matter and had presumably disposed of it.
So far as I know, that is the only case in which an Indian or a band council has been refused a fiat in recent times. There may have been some many years ago. When I visited Saskatchewan I met representative Indians, both in the northern part and in the southern part, and I did find an opinion there that they were not free to sue the crown. I told them that I thought they were more progressive than that. They were Canadian citizens; they had all the rights so far as access to the courts was concerned that I could think of, and that if anyone in the hall wanted to sue the minister or the crown all he had to do was to go outside and retain a solicitor to do it. We have not had any lawsuits since. I have repeated that statement in every meeting that I have had 
with the Indians. The right to sue the crown is well known by the Indians. Let there be no mistake about that.
I agree that there have been many complaints about maladministration, and there have been occasions in the past when perhaps if they had taken action they might have obtained damages in cases other than the one I have referred to. But these matters are adjusted. If complaints are made in or out of parliament, the Indian affairs branch does try to meet those complaints and in some way to make compensation for what might appear to be injustices. Nevertheless, I repeat, Mr. Chairman, that lawsuits are going on at this moment between Indians and the crown. There is no bar to them except the obtaining of a fiat, and that, as my hon. friend has pointed out, may be removed by action of this parliament; I think it is on the order paper. For that reason, sir, I would not want to give any credence to the suggestion that in the past there has been any objection to an Indian taking action against the crown, nor would I want to import into this bill the amendment suggested by the hon. member for Lake Centre.


John George Diefenbaker: I thank the minister for his explanation. I know of the case in Manitoba. The solicitor in the case was the late Bichard Mulcaster, K.C. The case in Saskatchewan to which I referred was in 1936, and was an application made by him, with myself to be counsel, in the case of the Mistawasis Indians. The application was made to the Department of Justice.
The minister referred to the case in Manitoba. I know the facts in connection with it. Indeed I read the debates in parliament long before I came to this house. If I recollect aright, the late Mr. Bradbury, M.P., of Selkirk, Manitoba, made a lengthy speech about millions of dollars that allegedly were owing to the band there by reason of the appropriation of certain lands in Manitoba that were taken over by the crown many years before. Again, speaking from recollection, I seem to recall that an action was started in the Exchequer Court of Canada about 1908 or 1909-the minister may correct me if I am wrong-and the action never came to trial. Is that not so?


Walter Edward Harris: That is right.


John George Diefenbaker: Yes. I am speaking from recollection. I know that case very well. But the minister has not grasped the significance of what I have in mind. I do not say that an Indian has not the right in ordinary matters of recourse to the courts, but what I say is he has not the right today, except in the specified sections that allow aft appeal to the Exchequer Court of Canada, to appeal

against administrative orders, except those specially covered by this act. In other words, he is in the position of being subject to order and direction under the act, except in so far as the three or four sections which allow an appeal to the exchequer court are concerned. He is in the position of a person whose rights may be determined, whose responsibilities may be declared, but at the same time, whether acceptable to him or not, he has no recourse to the courts, either by action, by prerogative right of mandamus or prohibition or certiorari.
These are the cases that I have in mind. These are the matters on which I am asking that the Indians be placed in a position equal to the rest of us. These are the rights. The right of appeal against an order of the king's ministry should be preserved to the individual. There is a case in that regard, reported I think in 1940 Supreme Court Reports, where in Saskatchewan a minister of the crown failed to discharge his responsibility under the natural resources act. The individual whose rights were interfered with had no right of action against the crown. I point out that he was not an Indian. His counsel carried the matter to the courts, by the use of the king's prerogative right to preserve the king's subjects from the tyranny of the king's ministers. That matter came before the court of appeal in Saskatchewan, and the court decided that every person within the king's dominions has the right of appeal to the king, and that the king in turn will ask that his ministers or his servants shall not diminish, interfere with or abrogate the rights of the subjects.
That is what I have m mind under this act, where tremendous powers are vested in the minister. Those powers can be exercised by the minister without right of appeal to the courts, except under certain specific sections which grant that right of appeal. For instance section 47 refers to authority conferred upon the minister by other sections, one of which deals with the testamentary disposition of property, the descent of property and the like.
Section 47 says that a decision of the minister made in the exercise of the jurisdiction or authority conferred upon him by section 42, 43 or 46 may, within two months from the date thereof, be appealed by any person affected thereby to the Exchequer Court of Canada, if the amount in controversy in the appeal exceeds $500, or if the minister consents to an appeal. Then, the second subsection states that the judges of the exchequer court may make rules, and so on.
Indian Act
There are a few provisions in which appeals are allowed, but many sections deny the right of appeal from the minister. There can be no appeal from the minister's decision unless, as in section 47, the power is actually granted. I am asking the minister to grant to Indians affected by administrative regulations or rulings the right of appeal to the king's courts, in order to preserve the rights of the individual against the possibility of injustices on the part of the minister or his advisers.
The minister takes the broad and general view that there is a right of appeal to the courts by Indians. Certainly, they have a general right; but within the Indian Act they are restricted and are denied an appeal, except where it is specifically given. There is no disagreement between us that an Indian can appeal if a decision in a criminal case is made against him, or if he wishes to take action in the courts. But the right of appeal under the Indian Act, in so far as administrative matters are concerned or, indeed, in so far as declaratory orders by the minister are concerned, is denied, and that right exists only where specifically given, as set out in section 47.
I am glad the minister has brought the matter up in this way. There is never any disagreement between us that the Indian has a general right of recourse to the courts. The disagreement arises when it is realized that, under the Indian Act, except where granted the special right of appeal, he has no rights in the courts of the country. If he had the right, as the minister insists, there would have been no section 47 granting him a specific right in certain circumstances. Owing to the fact that in respect of various types of orders under the act that right of recourse is not available, I made application to the minister to give consideration along the lines suggested.


Walter Edward Harris: Mr. Chairman, I appreciate what the hon. member has said; but I wonder if we have not narrowed the field of discussion from that indicated in his opening remarks.


John George Diefenbaker: No.


Walter Edward Harris: I gathered from his preliminary statement that there were few rights, if any, in an Indian for access to the courts.


John George Diefenbaker: No, I did not say that.


Walter Edward Harris: Then I misunderstood the hon. member. We have now confined ourselves to section 47, as an example of an appeal, under conditions to which I shall refer later. Section 47 is in the act because the minister is created a court in
3086	HOUSE OF
Government Employees Compensation Act respect of certain probate and administrative matters. Provision is made for an appeal roughly equivalent to the appeal which exists in surrogate courts, in connection with ordinary estates work.


John George Diefenbaker: Excepting to a different court.


Walter Edward Harris: Yes, as my hon. friend says, excepting to a different court. So that one would expect it to be there in order to get the proper administration of estates.
However the other subject he mentioned, namely the case in Saskatchewan affecting a minister of the crown, I thought closed the argument against the amendment. I think the decision in that case was made on the broad basis he stated, namely that the right to a prerogative writ is not abrogated unless there is specific legislation saying so. And since there is no such provision in the present bill, I suggest that any court would hold just as the Saskatchewan court did with respect to those rights.


[Stage Direction]
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the bill be read the third time?


Some hon. Members:: Next sitting.



GOVERNMENT EMPLOYEES COMPENSATION ACT


Alphonse Fournier: the second reading of Bill No. 291, to amend the Government Employees Compensation Act, 1947.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Beaudoin in the chair.
Section 1 agreed to.
On section 2-General administration expenses.
Mr. Herridge:: Would the parliamentary
assistant explain the procedure under section 2?


Mr. Paul E. Cote (Parliamentary Assistant to the Minister of Labour):: Mr. Chairman, up until April 1 last there was a difference in the administration of this act as between Quebec on the one hand and the other provinces on the other. The situation now however is much the same throughout the country. The Minister of Finance pays into the fund of each provincial compensation board a certain amount each month to take


care of the administrative costs incurred in connection with the administration of the act through provincial boards. I do not know that I can add much to what I have said and I hope it satisfies my hon. friend.


[Stage Direction]
Section agreed to.
On section 3-Yukon Territory and Northwest Territories.
Mr. Macdonald (Edmonfon East):: 
[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
AMENDMENT OF ACT of 1950-51
Alphonse Fournier: the second reading of Bill No. 195, to amend the Consumer Credit (Temporary Provisions) Act.


James MacKerras Macdonnell: Mr. Speaker, before we go into committee, when we shall be able to ask questions in mere detail, I wish the parliamentary assistant

would say something as to the effectiveness of the act passed last September. Perhaps he could give us some figures in that connection and indicate in a general way whether there is a pattern of weakness that has developed and which is to be dealt with by these amendments. It seems to me that the amendments are more or less directed along the one line.


Mr. Speaker:: As the parliamentary assistant is acting for the minister, if he speaks now he will close the debate.


Mr. James Sinclair (Parliamentary Assistant to the Minister of Finance):: Mr. Speaker, I shall make a statement now, and when we get into committee I will answer any question that may be asked. As far as the first request of the hon. member for Greenwood (Mr. Macdonnell) is concerned, it is a little difficult, from the statistics assembled by the dominion bureau of statistics, to say what has been the full impact of the restraining effect of these consumer credit restrictions.


James MacKerras Macdonnell: I wonder if the parliamentary assistant would refer specifically to the regulations which were passed in the autumn and to those which were passed shortly after the turn of the year?


James Sinclair: Last fall after the passage of the act the first set of regulations were brought into effect. These provided for a down payment of one-third in the case of automobiles, with 18 months to pay, and a down payment of 20 per cent, with 18 months to pay, in the case of other goods described as consumer goods. That was not greatly out of line with the type of credit which was being extended at that time by the larger business concerns in Canada. Some of the smaller dealers, especially those dealing in household appliances, had been extending more generous credit.
The initial step was taken to set up the administration and endeavour to have the various associations in Canada concerned with the sale of consumer goods, such as the Retail Merchants Association, the Canadian Automobile Association, and the finance companies, understand the type of regulations we were going to apply. Those regulations had just a mildly restraining effect according to the records of the dominion bureau of statistics for the last quarter of 1950. Each quarter the bureau publishes a report dealing with retail consumer credit, the last one being for the quarter ending December 31, 1950. I have the figures in manuscript form for some of the principal commodities for the next quarter, ending March 31, 1951.
Consumer Credit
Because the restrictions first in effect were found to be only mildly effective, on March 19 the rates were raised to a down payment of 50 per cent on automobiles, with 12 months to pay, and one-third down on other consumer goods. There was a slight difference in the treatment of these two groups. When a new automobile was purchased the trade-in value of the old automobile could be applied on the down payment, but in the case of furniture or other commodities the trade-in value was taken off the total selling price, after which the regulations applied.


James MacKerras Macdonnell: Why the
difference?


James Sinclair: I think the main reason was that in the case of the purchase of a new automobile the trade-in value of the old car generally represents considerably more than the down payment, especially when a person turns in a car only three or four years old. But the trade-in value of furniture is quite low and encouragement might have been given to placing a fictitious value on old furniture being turned in if it was going to be taken as part of the cash down payment.
The hon. member asked about the impact of the regulations upon the sale of these commodities. The first regulations came into effect on November 1 of last year. 1 think if 1 gave the sales of automobiles and then the break-down of the percentage of advances for different months it would give some indication of the trend. The sales of new cars were as follows:
October	 35,779
November	 32,880
December	 29,309
January	 33,759
February	 43,080
March	 49,404


Mr. Gibson:: Before the budget.


James Sinclair: The March figure of course undoubtedly does reflect accelerated buying before the budget. Of these the great bulk were sold for cash. The figures as to those financed in the same months are as follows: October, 11,919, or 33 per cent; November, 10,958, again 33 per cent; November, 9,257, a decline to 31-6 per cent; January, 8,348, or 24-7 per cent, quite a marked decrease in instalment purchases; February, 8,730; 20-3 per cent of the cars sold in that month were financed. Then in March, with the sharp rise in sales no doubt in part due to the expectations held as far as the budget was concerned, there were 25-8 per cent.


Mr. Drew:: How many cars?


James Sinclair: Of the 49,404 cars sold there were 12,745 sold on instalment buying in that month. There has been a steady increase

Consumer Credit
in the sales of cars since the regulations were introduced, but there has been quite a noticeable decrease in the percentage of cars sold under instalment buying. The other figures are a little more difficult to ascertain because the dominion bureau of statistics takes quite a bit longer to assemble them from all the trades concerned. Members undoubtedly have studied the figures given in the report covering the last quarter of 1950. Since the last quarter of 1950 included a month in which there were no consumer credit regulations as well as two months in which there were consumer credit regulations, the picture perhaps is not shown very accurately. The new report on consumer credit will be out in the next two or three days. From the manuscript, which unfortunately is not completed, I can pick out certain representative sales. These sales are given in percentages.
For example, in the period October to December inclusive of last year 68-7 per cent of all department store sales were for cash, 13 per cent on instalment buying, and 18-3 per cent on monthly charge accounts. We now have the figures for department stores for this quarter. They show an increase to 69 per cent in cash sales, quite a marked drop of 2-3 per cent to 10-7 per cent in instalment buying, and an increase in charge accounts to 20-3 per cent. Therefore there has been a drop in instalment buying through department stores, which are one of the principal methods of sale by instalment and credit accounts, a slight rise in cash sales and a rise in charge accounts.
The amendments in the present bill are quite minor. The first amendment has to do with a fairly new device used mainly by department stores. Most department stores have charge accounts which people are expected to settle at the end of each month. If they are in arrears two months of course the store takes the usual credit action. I have a table here showing the extent of days outstanding in department stores. For December, 1948, the figure for average days outstanding on charge accounts is 65, for 1949 it is 67, and for 1950 it is 71. However, these charge accounts are not instalment buying in the ordinary sense.
As well as ordinary instalment buying where a definite contract is arranged for each piece of equipment or furniture sold, department stores and other large stores have set up revolving credit accounts, six month accounts, where the customer establishes with the company a line of credit. Take, for example, an individual who is able to establish to the satisfaction of the credit manager that he can pay a line of credit of $240 in a

six month period. He is expected to make an immediate down payment of one-sixth, $40. If he does not buy anything from the store that month there is no need for him to make the next payment. If he makes any purchase whatsoever, then he must at the end of the first month pay the second one-sixth, or $40. That system is carried on throughout the six month period.
The loophole, so far as consumer credit was concerned, however, was that there was no conditional sale of the particular article which he might have purchased. He pays his $40 down, and then a week or two weeks later may decide to buy a small stove, for example. The stove is sold to him purely on the credit card which he has for his revolving credit account. The lawyers felt that was a loophole, and that the definition of conditional sale should be expanded to cover revolving credit accounts. The problem is a minor one because these revolving credit accounts limit the credit to six months whereas under our present regulations we allow conditional sales to be made over a twelve month period. It is true that the down payment in this respect would be only one-sixth, that is, the first month's payment, rather than the one-third which we ask for under a conditional sale, but that one-third of course applies to the whole year. Therefore the actual loophole to be closed is a very small one.
The second loophole which has been disclosed is the matter of payment under a contract for hire of consumer goods. There has always been a perfectly legitimate business in renting refrigerators and household furnishings of various sorts for short periods to people who may be transients or only want to rent furniture for a while. However, since the introduction of consumer credit regulations, both in Canada and the United States, a new device has appeared. Let us take a television set costing $600. Under our present regulations the purchaser would have to pay $200 down and pay the balance of $400 in the next year. There have been some merchants who have said to customers:	We will rent you this $600
television set for the next thirty months. You will not have any down payment to make. You will just pay $20 a month for the next thirty months, and at the end of that time we will cut the rental rate down to $1 a year.
This practice is not very widespread yet in this country. However, it became quite widespread in the United States. They stopped it by not authorizing such rental agreement beyond the fifteen months which they allow for conditional sales. They also required a one-third deposit by the person

renting on which the company must pay the customer interest. Therefore they have solved the problem quite nicely in that way. That does not in any way affect the perfectly bona fide rental of ordinary household furniture for three or four months such as conducted in most of the large cities by furniture stores.
The next amendment has to do with contracts for work and labour. Let me give two examples. First there is the example of a man taking a car to a garage and having a new engine installed. The claim was made that that was a work contract and that the regulations requiring one-third down and payment within a year did not apply. The same sort of argument was raised where a plumber would instal an automatic washing machine. He would supply the washing machine and instal it, and then claim that since his labour was involved it was a labour contract which did not come within the scope of this legislation. That, of course, was most unfair to ordinary appliance dealers and stores selling the same article, and being forced to sell it under this consumer credit act. So that, too, has been brought into the amendment with the thought that if it is desired the labour can be separated from the material content of the consumer goods involved, and the payments for labour can be whatever the person supplying the labour wishes, but the actual sale of the consumer goods content will be subject to these regulations.
The third change has been the requirement that loan companies who are not directly concerned with sales but who advance money to finance sales must keep records of loans for the purchase of consumer goods in the same manner as we require of the stores who actually sell the goods. The last amendment is to authorize the officers not only to inspect books but to take books to court if necessary, providing they must be returned within 90 days.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-"Conditional sales contract."
James MacKerras Macdonnell: I should like to make one or two general comments on this and then have something to say about the wording. Regret has been expressed in this house on previous occasions that the restrictions of last autumn were so inadequate. As a matter of fact I think the parliamentary assistant used exactly the right phrase this afternoon when he said they had a very 'mildly restraining effect.' I do not propose to dwell further on that at the moment, but
Consumer Credit
will come to the wording of section 1. The parliamentary assistant has already given some explanation of it, and I am referring to the words which are underlined: "whether or not the seller retains any property, interest or lien in respect of the goods." When I read that I thought it was to deal with a slightly different situation from that mentioned by the parliamentary assistant. I thought it dealt with cases in which the vendor gave up all title and in that way sought to escape the effects of the act. In other words he trusted the man and abandoned any legal remedy. Am I wrong in thinking this is intended to cover that case as well as other cases? If that is not so, would the parliamentary assistant again specify exactly what section 1 does?


James Sinclair: That situation has not been drawn to my attention nor, I believe, to the attention of the administrator. If the vendor should abandon all claim to future payment he would put the purchaser of the equipment in a pretty nice position.


James MacKerras Macdonnell: I did not
mean he would abandon all claim but that he would abandon property, interest or lien, which I suppose he could do. However, let us not talk about something which it is not intended to cover.


James Sinclair: The intention here is to cover the revolving credit plans of department stores.	They present no real problem
actually, since they are for a period of six months rather than a year and are therefore well within the terms of this legislation. The only point of difference is that their first payment is only one-sixth instead of the one-third we require. On the other hand their period of repayment is only six months instead of the period of up to one year we permit.	The intention is to bring them
under the regulation. In that case there is no specific contract between the seller and the buyer covering the article that has been purchased under revolving credit.


James MacKerras Macdonnell: Then is it the hon. gentleman's understanding that in those cases the seller does lose title and has to depend upon the willingness of the creditor to pay?


James Sinclair: That would be my interpretation. It is the same as an ordinary charge account in any store. There is no actual contract of sale for the purchase of anything you may buy, food or clothing, on a charge account. What the revolving credit plan actually does is eliminate the necessity of

Consumer Credit
the customer dashing up to the credit office to establish his credit tor every major purchase he may want to make.


Mr. Murray (Cariboo):: I feel that we are
in danger of being shipwrecked in a sea of unlimited credit. It is a very good thing to extend credit under certain conditions, but I feel that credit today is unrestricted. You have only to look at the daily newspapers to see page after page of advertisements covering goods very often sold on credit. I reside in a country where credit is very limited. We are fifty miles from a railway, and the trust companies and banks will not loan money on land. You must have very good assets in order to get loans of any kind. The same situation prevails in many parts of Canada far from the great commercial centres. The further you get from St. James street and Bay street the more limited your credit becomes; and because these people are denied credit they are selfsufficient, they stand on their own feet, they are prosperous and happy. I would like some of our city dwellers to think that over.


An hon. Member:: City slickers.


George Matheson Murray: No, I do not use
the word an hon. gentleman has used. We are victims of habit. We are gregarious. We gather in cities. We like to be together. We like to go to picture shows and to have all the attractions of Sparks street, Bloor street, and so on. I believe credit is destroying this country. If I were writing a new charter for Canada one of my first acts would be to teach children in the primary schools the dangers of signing a promissory note. As far as a mortgage is concerned I would place it in the same category as any other dangerous thing. My hon. colleague from Oxford is not here. He is a pharmacist, and he would tell you that in his place of business poison is labelled in a very prominent way. I think the grief and misery we have in this country are due to people signing mortgages without a second thought. Take a young man whose father leaves him a farm free of debt. Some smart salesman comes along and wants him to buy this, that or the other. He tells him, "You can pay for it over a long period of years; just sign here," and the farmer signs on the dotted line.
I see some of my C.C.F. friends are waking up to this. I wonder why the opposition in the house does not take up these matters which are so vital to family life in this country. Look at the indebtedness of Canada-


Louis-René Beaudoin: Order. The hon.
member will realize that this bill does not cover the whole field of investment and credit.

The examples he has cited, such as mortgages, are quite in order as long as they prove a point which is related to the bill, but the hon. member should not expand upon these examples to such an extent that he loses sight of the fact that we are dealing now with consumer credit. The principle of the bill is not now under discussion, and his remarks must be strictly relevant to the section before us.


George Matheson Murray: I thought I was in order in discussing consumer credit, and that my remarks were pertinent to this matter now before the committee. I say that it extends to other fields within the nation. If the nation goes into debt, the province accumulates vast debt, the municipality and so on down to the family. I believe it is a matter which should be very prominently before this house. The curbing of credit would help us win many victories in Canada.


Mr. Jones:: I am in full sympathy with this bill, and I support it wholeheartedly. It has been drawn to my attention that a little injustice is being done to the motor car dealers of British Columbia. I have some correspondence from the Motor Dealers Association of British Columbia with headquarters in Vancouver, as well as from several independent garages in the interior of the province. They cite their experience since this measure was introduced. In order to give some indication of what they have in mind, I shall quote briefly from one letter which is typical of the others. It reads:
The recent credit regulations have certainly accomplished the aim of the government to restrict unwarranted spending. They have also put a serious obstacle in the way for a man that is compelled to purchase transportation in order to enable him to get to and from his work. They do not hinder a man of means, who can purchase a new car each year, but they do seriously hurt the worker that must have essential transportation.
The letter continues along that line. It points out that the generally high freight rate to British Columbia severely handicaps British Columbia dealers, and puts them at a disadvantage on each car that is sold. For example, the freight from Windsor to Vernon, B.C., is approximately $300, whereas the freight on the same car delivered to Ottawa or Toronto would be $30 or $50. I believe the dealers have approached the government about this matter. They believe that there should be three distinct districts created for the purpose of the credit regulations on automobiles, and they ask for relief on that basis. They would divide Canada into three zones, one west of the great lakes, Ontario and Quebec, and the maritimes. They have asked that the zone west of the great lakes and the maritimes be given relief to the

extent of a forty per cent down payment with fifteen months to pay. It is felt that credit regulations covering the whole of Canada, as they do, are unfair because they work a hardship on the purchaser of a car in British Columbia who would have to pay at least $125 or $150 more by way of down payment than the purchaser of the same car in Ottawa or Toronto.
With that in mind, they suggest that the government should give serious consideration to setting up these three zones now. I do not know if that can be done at this stage of the .bill, or whether the parliamentary assistant has investigated the matter and found no practical solution. I do feel, however, that an extension of time should be given to those who are in the west or in the maritimes, and who have to purchase a car. In my riding the main source of income is the fruit, on which payments are made twice a year. Naturally, those people with a monthly income can meet their monthly payments much more easily than people who receive their income in one or two payments during the year. For that reason, I would ask the department and the parliamentary assistant to give serious consideration to the granting of the request of the association of motor dealers of British Columbia.


James Sinclair: Mr. Chairman, I am particularly pleased to hear the member for Yale speak so well of the consumer credit regulations generally, because he has extensive knowledge of their workings in his own retail businesses. The problem of the impact of these regulations on British Columbia has been raised with the minister by the automobile association. Two points arise immediately. Of course, the argument raised applies only to Canadian cars. I am told that British-made cars are laid down in Vancouver at prices lower than any other place in Canada, including Halifax, because they generally come out as deck loads on the timber ships returning to B.C. The first step, therefore, in any regulation to cover this situation would have to be the singling out of whether the car was of Canadian or British make.
The other point it raises is the fact that once you try to get zones for consumer credit regulations based on independent things such as freight rates or local sales tax-the sales tax of three per cent in British Columbia is another factor which raises the price-it makes the regulations very difficult to administer. This time our regulations are even simpler than those in effect during the last war when we had a variety of rates for different commodities. The retail trade found it very difficult to keep abreast of these
Consumer Credit
various rates, the various types of down payment and terms of repayment. It was for this reason that, after consultation with the retail trade of Canada, the department decided to make the regulations as simple as possible. In the case of a car it is a half down, and twelve months to pay; in the case of other consumer goods, one-third down and twelve months to pay. For these reasons the department decided that it would be best to have one national set of rules. Once you extended such considerations to the purchase of Canadian-made cars, you would I suppose have to give similar concessions to the sale of British cars in Winnipeg or Regina. Then, of course, you would be led into concessions to other heavy goods in which the freight rate is a substantial item, such as stoves and refrigerators.
The other point raised by the hon. member is already covered in the regulations. It is provided that in the case of a farmer, fisherman or other person whose annual income is derived mainly in one or two lump sums, he can make payment in that fashion, provided the terms of payment are still within the year mentioned in the regulations.


James MacKerras Macdonnell: Is any
attempt made to distinguish between pleasure cars and the cars used in the course of a man's occupation? The objection one hears raised to the regulation is that they very often hurt the man who needs a car in the conduct of his business. I should like to know if that has been considered, or if it is thought possible to do that? My own feeling would be that if it were possible it would be a good thing. Whether or not it can be done on the basis of the cost of more expensive cars and less expensive, I do not know.


James Sinclair: The criterion of distinction used there is whether the car is individually owned or owned by a company. A car owned by an incorporated company is primarily for business use, whereas cars owned by individuals are very often partly for pleasure and partly for business. There is an exemption in the regulations for cars which are used for business purposes entirely. We do not exempt a car which is used by an individual partly for his business and partly for pleasure.


James MacKerras Macdonnell: There is no regulation whereby a man could satisfy you that, in fact, his car, although personally owned, is used for his business? There must be thousands of such cases.


Mr. Murphy:: Can the parliamentary assistant clear that up, because I know firms who have representatives on the road, and the

Consumer Credit
employee owns the car but uses it for his business. He also has a car of his own for pleasure use. What would be the ruling in that case?


James Sinclair: If the company owns the car-


Joseph Warner Murphy: I do not mean that. The individual owns the car, but it is used for business purposes. He owns a car for his own personal use.


James Sinclair: I am afraid in that case both of them would be subject to these regulations. With regard to the other point raised, when an employee of a company has to have a car, and the company itself does not care to provide a car for him, I would think in most cases the company would certainly assist in whatever financing he would need himself to carry the down payment if that were necessary. Here again there is the great problem of making a national law simple, effective and understood. We try to keep our administration staff down to as small a number as possible in the interest of economy. If we had to investigate each of the thousands of claims that a privately owned* car was used more for business than for pleasure it would require a very much bigger and more costly staff than we propose to have, and it would have to be on a widespread national basis.


Mr. Low:: Will the regulations which apply to new cars also apply to used cars?


James Sinclair: That is so if they are financed. New cars of course are wholly sold through dealers. The bulk of the used car trade is one individual selling to another individual. We have no control over that at all; but if cars are sold on the instalment plan through regular dealers, exactly the same regulations apply.


Joseph Warner Murphy: Does it apply to the dealer who takes back a refrigerator, a stove or something like that?


James Sinclair: The same regulations apply to used equipment. With the regular conditional sale, which is financed on the instalment plan, the regulations apply; but the personal arrangement between individuals is different. It might be desirable to apply it, but the actual job of policing it or enforcing it would be beyond any reasonably staffed government bureau.


Mr. Fraser:: That is a hardship on* the regular authorized dealers. Would they not feel the effects of it?


James Sinclair: The actual division of cars which are sold through dealers and cars which are sold through individuals has not changed very much since the regulations were

introduced. The ordinary person who is trying to sell his car personally generally wants cash. It is to the dealer that a person goes if he wants more generous treatment in the way of cash payment than he can get through an ordinary private sale. If you look at the evening papers you will see that most used cars offered by individuals are for cash, or at the outside on six months terms. If an individual wants it financed he sells to a dealer, or finances through a loan company, and so the sale becomes subject to these regulations.


Solon Earl Low: The volume would be small.


James Sinclair: Yes.


Owen Lewis Jones: Can the parliamentary assistant tell me what method is to be adopted to enforce these regulations? Are you going to depend on individuals to enforce it, or are you going to appoint a staff to supervise enforcement?


James Sinclair: The number of administrative officers here, both in the last war and so far, has been comparatively small because of the very great co-operation we have had from the trade associations. We have ten inspectors in the field, and a total staff of eight here at Ottawa. Groups like the Retail Merchants Association, for example, are the very first to report what they consider to be infractions by merchants. The merchant in the small town who is obeying the regulations can very quickly tell if his competitor is, by evasion of regulations, getting customers whom he had, or customers who he knows have not the down payments. That is where our field men move in immediately. So far this has been a comparatively quiet period in which the trade and the customers have been getting used to the regulations. There have not been any prosecutions as yet, although seven cases are now before the Department of Justice for their opinion. There have been quite a number of minor infractions which have been reported. Most of those infractions were made in ignorance of the regulations, not through a deliberate attempt at evasion, and they have been adjusted and contracts redrawn in line with the regulations; but the co-operation received from the actual industry, the department stores and retail merchants across the country, has been exceptional.


Mr. Quelch:: I cannot quite understand why there should be credit restrictions on the sale of used cars. In most parts of the country they are a drug on the market. After all, if people spend their money on used cars they will not be able to buy other goods, and to that extent they will relieve inflationary pressures in other ways. Many of the dealers

who in the past have had new cars now find great difficulty in selling them because of the requirement of 50 per cent down and the balance in twelve months. Would it not be possible to relieve the situation in so far as the used car is concerned?


James Sinclair: One of the most immediate
problems would be the definition of what is a used car. That of course was a great problem under price control during the last war. If credit curbs are to be applied to the sale of cars, I think it is only fair to the automobile manufacturers and to the new car dealers at least that the same curbs be applied to used cars as to new cars. The curbs of course are less onerous in terms of dollars on used cars because, the price being lower, the down payment is lower and the monthly payment is lower; tout one of the main difficulties would be to define what is a used car.


Solon Earl Low: And yet I think the hon. member knows that the price of a car one year old is almost as great as the price of a new one.


James Sinclair: That depends of course at the present time on the make of the car. It depends on cars which are still in short supply, the manufacturer's supply.


Solon Earl Low: If a person goes to one of the
used car lots in this city today and finds a 1950 car with a mileage of 10,000 miles or 15,000 miles he will find that it is priced almost as high as a new car.


Mr. Graydon:: Like wine, it improves with age.


George Alexander Drew: Has there been some evidence
of an accumulation of used cars to a degree that would cause a measure of concern at the present time?


James Sinclair: Not to the knowledge of the dominion bureau of statistics. Unfortunately, on used cars our figures are not nearly as accurate as they are on new cars, because it is dealer sales which are reported, and a great deal of used car sales are not through dealers, but the sale of used cars has kept step pretty well with the sale of new cars across the country. Let me give first of all the financing of used cars by numbers in the first quarter of each of these years, 1948, 1949, 1950. Here are the number of used cars which are sold under finance, and that is the only record we have, because we have no record of private transactions:	In 1948,
17,488; in 1949, 23,658; in 1950, 37,160; and in 1951, 56,256. In fairness again I must point out that there was a quite marked increase in the sale of used cars as well as new cars in the month before the budget.
Consumer Credit


James MacKerras Macdonnell: Meanwhile,
can the parliamentary assistant tell us what is the rate of production of new cars?


James Sinclair: I have not got the rate of
production of new cars, but I have the rate of sales of new cars, and that figure I gave earlier.


James MacKerras Macdonnell: I was going to refer to that figure. Just running roughly over it, the figures that were given were as follows:	October, 35,000; then going up to
37,000. In December it was down to 29,000. In January, it was 33,000; in February, 43,000; and in March, 49,000. In the face of those numbers one would say that the restriction has not been very effective, but there may have been strong offsetting influences at work. Can a word be said on that?


James Sinclair: The restrictions of course
were designed to cut off the buying of cars and other commodities by people who really did not have the money, who were in a credit range far beyond their grasp; but it was also designed to encourage the payment of cash rather than borrowing, and the fact that the instalment purchase has fallen in the same period from 33 per cent in'October, 1950, which was the normal month before the introduction of these consumer credit regulations, to 20 per cent, and even in the month before the budget with accelerated buying to 25 per cent, shows that these restrictions are encouraging more cash sales and less credit sales.


Gordon Knapman Fraser: You have not the figures for
April?


James Sinclair: They are not out yet.


Gordon Knapman Fraser: You will find a great drop in the sale of cars. They are a drug on the market now.


James Sinclair: That is of course to be expected. That happens with the sales of almost every commodity in which there is to be an expectation of tax changes. It would happen in the month before. It is to be expected that people may hurry their purchases to the month before the budget. At the same time it would have an effect upon instalment buying, because those people are not so likely to have the cash available and they might have to turn to credit to finance the purchase of a car in March which they had not expected to purchase until April or May.


Gordon Knapman Fraser: I understand the reason there was such a demand for cars in March was that the workers in the automobile factories understood that nickel and chrome plate were not going to be put on cars after a certain date, so that they asked that they be

Consumer Credit
given their cars before the budget came down, or before the restrictions on nickel took place.


Mr. Hosking:: Did I understand the parliamentary assistant to say that cars that were not financed through finance corporations could be financed beyond the limits controlled by the corporations?


James Sinclair: No, 1 did not say that. What I said was that the sale of a car from one individual to another might be affected in this way: for example, if I decided to sell my car tonight, put an ad in an Ottawa newspaper and found a customer, the actual arrangements which I as an individual might make are not controlled by the act. If they had to come within the framework of this measure, enforcement would be difficult. The actual fact however is that in connection with those personal sales the general expectation of the seller is to have all cash, which is the desire behind this legislation. Certainly the ordinary private seller of a car is not in a position to extend credit for six months, a year or eighteen months to some purchaser generally unknown to him. That is why such sales are not much of a factor when it comes to curbing credit.


James MacKerras Macdonnell: I should like to return to the question of wording, and to the explanation given. If I understood the information given about the revolving fund, that has to do, it seems to me, with the relations as between debtor and creditor, between vendor and purchaser. Does the parliamentary assistant agree that I am right in my understanding of what he said?


James Sinclair: Yes.


James MacKerras Macdonnell: It has nothing to do with title to the goods. It is really more in the nature of a banking relationship. If that is so, then I would ask hon. members to look at the words of the amendment, which have to do wholly with the title to the goods, where it says "whether or not the seller retains any property, interest or lien in respect of the goods." If I have understood correctly the explanation given, then I am not able to understand why this amendment, which has to do with the question of title, has any effect on the other relationship, which is one of debtor and creditor. I am wondering whether that can be right.


James Sinclair: Well, this being a point which was raised by lawyers in the Department of Justice, I am not competent to discuss it with the hon. member, so far as the legal aspect of the matter is concerned. But earlier in the same section we find the words, "under the terms of which a buyer is to obtain possession of any goods without paying the

price thereof in full". This covers the case of the revolving fund.


James MacKerras Macdonnell: But again, that is not a question of title; it is just a question of possession. I am not much of a lawyer, either, but it does seem we are dealing with two entirely different things. With deference I suggest that possibly this section might stand until the lawyers explain what they mean. Unless I completely misunderstood the explanation given-well, as the saying goes, ''Dem two tings don't paralyse."


Henry Alfred Hosking: In Ontario title to the car is sold with the licence. That is the title to the automobile. The note or lien on the automobile is held by way of a lien mortgage, which is something separate from the title. In connection with the title of an automobile in Ontario, there is no registration of a lien note in any way. The title is clear, once the car is sold. Title must be given to the new owner.


James Sinclair: Title is covered by the terms of conditional sales. But, to get back to the revolving fund, the definition in the act of a conditional sale did not include that type of sale. The underlined words here make it quite clear.
The point is largely academic because, with the revolving fund, since they limit themselves to six months they are still within the scope of the legislation in any case. But the department, in order to make it clear that even in those cases where a separate contract was not executed for the sale, for example, of a refrigerator, where the purchase was made under this revolving fund, has made it so the conditions of credit under this act would still apply.


Owen Lewis Jones: Where a person sells his car on his own terms does he have to comply with the act?


James Sinclair: So long as he has owned the car six months, on a sale he arranges himself. If he has owned the car six months the sale is his own responsibility.


Owen Lewis Jones: It does not come under the act?


James Sinclair: No.


Owen Lewis Jones: Does that not leave a wide opportunity for abuse? The ownership of the car can be retained until it is transferred. I am only suggesting that it seems to me that a private car owner could hang on to his car, and sell it within a two-year period if he liked.


James Sinclair: First of all he must own it for six months, and secondly, one thing the individual wants is cash. If he goes to a finance

company or a lending institution he must make certain arrangements. If he wishes to make a private arrangement for the sale of the car, that does not come within the act. The main purpose of selling the car, as a rule, is to raise as much cash as he can. Certainly he would not normally be content to wait one or two years for his payment.


[Stage Direction]
Section agreed to.
On section 2.
James MacKerras Macdonnell: I am bearing in mind what the parliamentary assistant said about the mixture of work and goods. He gave an instance of a man having work done on his car, and of goods supplied. Is this provision to apply only to the goods, or also to the work done?


James Sinclair: The provision applies only to the actual goods put in. If the contractor wishes to render two separate bills, one for labour and one for goods, his bill for labour can be spread over ten years. That is his concern. However, the bill for goods must come within the confines of the act. What generally happens is that a store sells just one thing, namely the goods and the cost of installation. They want the whole cost included under this credit regulation. But if an individual wants to separate the goods from the labour, then the consumer credit regulation applies only to the goods. The regulations will be drawn up after this measure is passed.


James MacKerras Macdonnell: Then I
would direct attention to the last two lines of the section:
Engages in the business or makes a practice of lending money.
Would that include the chartered banks?


James Sinclair: It includes the chartered banks and the small loan companies, yes.


James MacKerras Macdonnell: Then are they to be required to keep accounts in a special way; or would the ordinary accounting of the chartered banks, for instance, be sufficient for these purposes?


James Sinclair: I am informed by the superintendent of insurance that the ordinary records in the chartered banks, and in connection with personal loans of finance companies, are perfectly satisfactory. All this says is that they must have such accounts available in connection with consumer regulations as well.


[Stage Direction]
Section agreed to.
Section 3 agreed to.
*Bill reported.
Canadian Commercial Corporation
Alphonse Fournier: the third reading of the bill.


Stanley Howard Knowles: By leave.


[Stage Direction]
Motion agreed to, bill read the third time and passed.


Clarence Decatur Howe: the second reading of Bill No. 284, to amend the Canadian Commercial Corporation Act.


Mr. G. J. Mcllrailh (Parliamentary Assistant to the Minister of Defence Production):: Mr. Speaker, when the new
Department of Defence Production was set up at the start of the current fiscal year it took over the task of the procurement of supplies for the three armed services, which function up to that time had been performed by the Canadian Commercial Corporation. The corporation was then left with the task of carrying out transactions for other governments and of attending to certain bulk purchases. The change in its duties was quite considerable and as a result certain changes are required in the Canadian Commercial Corporation Act.
These changes do not involve matters of principle, they involve only matters of clarification. Perhaps it would be more desirable if I dealt with them in committee, but at this stage I could indicate what they are. The first amendment simply clarifies the definition of minister. There was some doubt as to whether the next amendment was legally necessary, but it does make clear that the corporation has the legal capacity to perform the functions authorized by other acts of parliament. The third amendment clarifies the language used with respect to the revolving fund authorized under the Canadian Commercial Corporation Act. It does not add any new power to what was stated to be included when the section was originally passed by this house, but it does clarify the language.
The next provision is to permit a smaller quorum at the meetings of the directors, reducing the quorum to three. The number of directors is being reduced from nine to six. The act authorizes a board of directors made up of from five to nine with a quorum of five, which will be reduced to three by this amendment. The concluding section makes it possible for certain employees of the corporation to be brought under the benefits of the Civil Service Superannuation Act.

Canadian Commercial Corporation


James MacKerras Macdonnell: I wonder
if the parliamentary assistant could make some general remarks about the scope of the work of the Canadian Commercial Corporation. I understand that since 1946 its work for the Department of National Defence has become vastly more important.


The Acting Speaker (Mr. Beaudoin):: If the
parliamentary assistant speaks now he will close the debate.


George James McIlraith: If I may be permitted to continue my remarks. Perhaps I could give that information by indicating the number of contracts let during the last three fiscal years. In 1948-49 the number of contracts awarded by the corporation on behalf of the Department of National Defence was 65,308 with a value of $145,033,051. In 1949-50 the number of contracts was 84,600 with a value of $221,538,679. In 1950-51 the number of contracts was 112,000 with a value of $676,286,512. The figure for the number of contracts placed in 1950-51 is subject to final check, but I think it is accurate.
The values of the contracts placed on behalf of foreign governments and relief agencies for the same three years were as follows:
1948-	49	
$57,624,6761949-	50	
31,194,1381950-	51	
102,937,447


James MacKerras Macdonnell: Those would cover what agencies?


George James McIlraith: On behalf of foreign governments, and including certain agencies.


James MacKerras Macdonnell: I thought the parliamentary assistant referred to relief agencies.


George James McIlraith: The United Nations relief and rehabilitation administration was the one I had in mind. I just forget whether it was still in existence in 1948. But in any event it would cover any international organizations outside our own government. I can give the administrative expenses in connection with the contracts placed on behalf of the Department of National Defence, along with the percentage of the total contract value. These figures are as follows:
per cent
1948- 49	
$ 773,811.07	-531949- 50	
999,783.52	-451950- 51	
1,394,302.00	- 2062
It will be noted that the administrative costs in terms of the percentage of the contract values is quite small in the case of 1950-51, and out of fairness I think I should say that with buying increasing in the last few months of the year there might be a lag in the amount of administrative work. Hon. members perhaps should appreciate that, 
when considering the precise figures for the percentages. I do not know, Mr. Speaker, that there is much more I can usefully deal with that would illustrate the work.


James MacKerras Macdonnell: I think the rest will come in questions.


George James McIlraith: I think anything else can perhaps be dealt with in the committee stage.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-Minister.
James MacKerras Macdonnell: I want to
ask a general question about the relation between the Canadian Commercial Corporation and the Department of National Defence having regard to what actually happens when the Canadian Commercial Corporation, on behalf of the Department of National Defence, lets a contract for the preparation, construction and manufacture of goods for the Department of National Defence. What I want to be clear about is, what is the division of function? The Department of National Defence reaches the conclusion that it wants certain things, and it asks the Canadian Commercial Corporation to procure them. This matter has arisen in the public accounts committee. From that point on I am anxious to know exactly where the responsibility lies. I find it a little difficult to understand. Indeed it seemed to me there was perhaps a danger of duplication. I should like to be informed just what the division of responsibility is from that point on.


Clarence Decatur Howe: Mr. Chairman, there has been a change in the system of defence buying, particularly in. those purchases that require new facilities or new arrangements to produce. The Department of Defence Production has been established, and a good many of the duties formerly performed by the Canadian Commercial Corporation have been taken over by the production branches of the Department of Defence Production. For instance, the aircraft branch of the department is responsible for all procurement in connection with the aircraft program. Defence construction is handled apart from the Canadian Commercial Corporation. A separate crown company is responsible for defence construction. Similarly the gun division handles all procurement in connection with guns except for foreign orders. Orders from foreign governments are routed through the Canadian Commercial Corporation for the reason that production has to be financed for a time before outside payments are received.
The scope of the corporation has been reduced. A number of men formerly

employed by the corporation have been taken over by the procurement branches. For instance, Mr. Trethewey, formerly head of the aircraft branch for Canadian Commercial Corporation, is now one of the heads of the aircraft production branch.


James MacKerras Macdonnell: I should like to ask a question at that point. On the face of it, it appears that administrative expenditure for 1950-51 for the Canadian Commercial Corporation, if I understand the matter correctly, is about $400,000 larger. Is the change that the minister is describing just taking place now so that it will alter that? The figures given by the parliamentary assistant show that.


Clarence Decatur Howe: The change in organization took place in the late months of 1950. The Department of Defence Production was only officially organized as of April 1, but its activities began to function during the late months of 1950. If my hon. friend will note the size of the contracts placed by the Canadian Commercial Corporation he will understand why in that year there was a considerable increase in staff and in expenditures. I presume for the year 1951-52 the volume handled by the Canadian Commercial Corporation and the expenses involved will be down instead of up.


James MacKerras Macdonnell: What comes from the minister's answer is that there are now really three organizations. There is the Department of National Defence, the Canadian Commercial Corporation, and the Department of Defence Production, and as I understand it the duty of defence production is to do a good deal of the work formerly done by the Canadian Commercial Corporation. Is that right?


Clarence Decatur Howe: Yes, that is correct.


James MacKerras Macdonnell: My basic question still remains. Just what is the division of responsibility between the Department of National Defence, which gives the order so to speak, and the Canadian Commercial Corporation or defence production which I suppose we can say does the arranging to get the goods? As I understand the matter in the public accounts committee, the Department of National Defence naturally is deeply interested in what is being obtained, and I presume in a way it is the Anal judge and even the expert as to what it needs. As I understand it, it concerns itself with following through when airplanes, guns or tanks, for example, are being built. It follows through and keeps in touch with the work. It is that relationship between it and defence production, which the minister says is in
Canadian Commercial Corporation charge of these things, that I want to get at. What does the minister consider is the division of responsibility?


Clarence Decatur Howe: Relations between the Department of National Defence and the Department of Defence Production remain unchanged. Requisitions come from the deputy minister of national defence to the deputy minister of defence production. How they are handled in the Department of Defence Production is a matter of departmental organization with which the military side is not concerned. The division of the work of the two departments is that the defence department specifies what is required. They say what they want, when they want it and where they want it. In other words, any plans prepared for buildings are prepared by the Department of National Defence. Any specifications for goods to be purchased for the Department of National Defence are prepared by that department.


James MacKerras Macdonnell: Let us take airplanes.


Clarence Decatur Howe: They set out the type of airplane. Of course the actual development of airplanes is not carried out directly by the Department of National Defence, but nevertheless that department sets out the over-all specifications and works with the Department of Defence Production in following the development through to the final mock-up. After that it becomes a matter solely for defence production. However, the Department of National Defence has another function, that of inspection. In other words, the Department of National Defence must say that the article is satisfactory. For that purpose there is an inspection branch of the Department of National Defence which is responsible for inspection. They say what they want, when and where they want it, and they decide whether the article delivered is up to their specifications. If not, they have the right to reject it.


Gordon Knapman Fraser: Does the Department of Defence Production also have inspectors?


Clarence Decatur Howe: Yes.


Gordon Knapman Fraser: Then it is duplication.


Clarence Decatur Howe: It is not duplication. There are certain matters that we inspect by agreement, but the final decision as to whether an article is up to specification rests with the Department of National Defence. In some cases, as in the case of aircraft, there is some division of the inspection work, but there is no duplication. There was duplication in the last war. There was plant inspection and the British inspection. That has been eliminated.

Canadian Commercial Corporation While there is inspection of all stages, in some cases by agreement it is performed by inspectors of the Department of Defence Production, and in other cases it is inspectors of the inspection branch of the Department of National Defence.


George Alexander Drew: Would this be the organization that would negotiate the contract under which Sorel Industries now occupy the arsenal across the river?


Clarence Decatur Howe: No.


George Alexander Drew: Would this organization have nothing to do with that contract?


Clarence Decatur Howe: You mean the contract for guns for the United States?


George Alexander Drew: I mean the contract for guns that was under discussion, by virtue of which Sorel Industries are making certain guns in the arsenal at Longueuil.


Clarence Decatur Howe: No; that was an arrangement made by the department, and Canadian Commercial Corporation would have nothing to do with that. The only interest Canadian Commercial Corporation has in the manufacture of guns is that orders from foreign governments-in this case an order from the United States government-are placed with the Canadian Commercial Corporation and serviced by them. Arrangements as to where the guns will be manufactured and negotiations with Sorel Industries and the plant at Longueuil would be matters for the gun division of the Department of Defence Production.


George Alexander Drew: Just so I may understand the procedure, do I gather that in the case of a contract for the manufacture in Canada of a certain type of gun or guns such as are under consideration in this case, the Canadian Commercial Corporation would negotiate the contract with the foreign purchaser and carry out the arrangements in Canada for the production of guns on behalf of that foreign purchaser, and that the details then would be worked out by the department for the actual production?


Clarence Decatur Howe: That is correct.


George Alexander Drew: Then may we take it that in this case the government of the United States negotiated a contract through Canadian Commercial Corporation for the purchase of guns of a certain type and that the corporation then entered into arrangements with the Department of Defence Production for the manufacture of those guns. Is that the way it worked?


Clarence Decatur Howe: That is right.


George Alexander Drew: Then the Department of Defence Production would make the arrangements which were under discussion whereby, in this case, Sorel Industries would plan the actual production in their own plant and in the arsenal which has been taken over?


Clarence Decatur Howe: That is correct.


Gordon Knapman Fraser: In regard to orders from foreign governments, does the external affairs office have to O.K. those orders before they are put through?


Clarence Decatur Howe: Yes, Mr. Chairman, every order for munitions of war placed by a foreign government must obtain the approval of the Department of External Affairs.


James MacKerras Macdonnell: I listened to what the minister said about there being no danger of duplication, and all I can say is that if there is no duplication he is a wizard, because we have all the makings of it. When we started this discussion I did not fully realize the complexity of the situation. I thought we were dealing primarily if not exclusively with the defence department and Canadian Commercial Corporation. Now we have the other organization in the picture, and for the life of me I cannot understand why we need the two other organizations in addition to the Department of National Defence.
The minister has made clear what happens in the case of contracts of certain kinds, and I am not going over that ground again. What he has not made clear, to me at any rate, is why we need these two organizations. I think the minister will agree as a matter of general principle that when you have three or four people working on one job there is prima facie a great danger of duplication, and frankly I do not understand the reason for what is taking place. We have had Canadian Commercial Corporation built up to us as a very useful organization, and let us assume that is so. Now apparently its functions are being diminished; it is to be considerably less important, and we find a new organization coming in. I confess that the matter disturbs me. This afternoon we are going to be asked to amend the Canadian Commercial Corporation Act to give the minister the very fullest powers under it, but we are still left with what seems to me a multiplication of agencies. I would like the minister to tell us further why we need them all.


Louis-René Beaudoin: Order. Perhaps the point raised by the hon. member for Greenwood could more properly be discussed on the administration item of the estimates of the Department of Defence Production.


James MacKerras Macdonnell: No.


Louis-René Beaudoin: I have listened to the discussion that has gone on for the last few minutes; 1 have read the various sections, and we are in committee of the whole on this bill studying section 1 at the moment. I wonder if at this time it would be in order to discuss the matter of duplication because of the existence of one or two or three corporations. There is no mention in any of the sections of this bill of Defence Construction Limited, for instance. So I think this point should be cleared up if the discussion is to be proceeded with in an orderly fashion.


Clarence Decatur Howe: With all respect, Mr. Chairman, I think I can put my hon. friend's mind at rest in a few words. Defence Construction certainly is not mentioned in the bill, but I brought it in, and I think perhaps I could make that relationship clear.
First let us take inspection. The duty of inspection technically rests with the Department of National Defence. I think my hon. friend will appreciate why that should be so, because after all the defence department certainly should be entitled to say whether the article for which they are paying is satisfactory.


James MacKerras Macdonnell: And they
have an expert staff to do that.


Clarence Decatur Howe: Yes, they have a branch of their department for that purpose. However, that branch is not large, and it is not easy to recruit new members quickly. They found that in connection with the inspection of buildings they just did not have the engineering staff available for the purpose; so by arrangement, to which we both agreed, we augmented the inspection staff by recourse to the staff of Central Mortgage. My hon. friend will understand that. Central Mortgage acts as consultants, really, or inspectors for Defence Construction.


James MacKerras Macdonnell: This is
another agency.


Clarence Decatur Howe: My hon. friend may laugh, but he is accustomed to dealing with corporations. The reason I like corporations is that we know how they keep their books. Everyone understands a corporation; everyone understands a corporate statement. If the departmental organization is carried too far it becomes very difficult to follow. The government's method of keeping books is not the method of a businessman, as my hon. friend will agree; and if we have a big job to do I prefer to handle it in a corporate structure where bookkeeping methods are well defined and well understood by everyone. That is the reason for the two corporations.
As to the point in which my hon. friend is interested, while the corporation we are
Canadian Commercial Corporation discussing here was a very effective means of handling defence requirements in peacetime, it is not capable of expanding to the extent required to take care of new productive facilities and all the ramifications of a $5 billion defence program to be completed in three years. What we have done is take from this corporation certain functions such as aircraft production, gun production, chemical production and so on, which it formerly performed; and these are now peformed by branches set up for those specific purposes. I hope I have made myself clear.


James MacKerras Macdonnell: Yes, Mr. Chairman, the minister has made it dear, but I still want to ask this. He has told us there is a competent engineering staff in the Department of National Defence who lay out the work to be done, who follow it through and inspect it. Am I right in assuming there is also a competent engineering staff in defence production? Will the minister speak on that?
Then, we have had it indicated to us that the Canadian Commercial Corporation has been shorn of a good many of its functions. The question naturally arises, and I am appreciating what the minister said about his preference for corporation books rather than government books, but it does not necessarily follow you need two corporations instead of one just for that purpose. Why could not either the Canadian Commercial Corporation have been given the necessary expert assistance to do what is now being done by defence production or vice versa? Why could not defence production take over the whole thing? Is there a natural division between the two?
I come back to my first question. Will the minister say what engineering staff there is in defence production, and whether or not there is any in the Canadian Commercial Corporation.


Clarence Decatur Howe: The engineering staff of defence production is small, but engineering services available to Defence Construction Limited are retained for the purpose of inspecting construction.


James MacKerras Macdonnell: They remain in the Canadian Commercial Corporation or the other company?


Clarence Decatur Howe: They are retained by Defence Construction Limited. Defence Construction Limited' is responsible for the building carried out by the armed forces, and Defence Construction Limited retains the engineering services that are made available to it by Central Mortgage and Housing.


James MacKerras Macdonnell: That is
merely to do that building?

Canadian Commercial Corporation


Clarence Decatur Howe: That is right.


James MacKerras Macdonnell: I think a
while ago we were considering the functions of defence production in connection with aeroplanes and things like that.


Clarence Decatur Howe: Well, an aeroplane order is
handled by the production branch of the department. There is a branch that devotes itself exclusively to the production of aircraft, and they have everything to do with the production of aircraft.


James MacKerras Macdonnell: That is the
Department of National Defence.


Clarence Decatur Howe: No, the Department of Defence Production.


James MacKerras Macdonnell: But the
minister has already told us that the Department of National Defence also concerns itself with that.


Clarence Decatur Howe: They decide what aircraft
they want, and they follow the production through to determine they are getting it. They perform certain inspection services, the major inspection services in that particular case.


George Alexander Drew: I understand the difficulty of
the chairman in regard to the field that this is covering, but I would point out that section 1 which is under consideration is the general section, and also the section which defines the minister under this particular act as the Minister of Defence Production. I believe, therefore, that this is the one place where we can get some rationalization of the need for the amendment, and also possibly the question as to whether other amendments might even be desirable from the point of view of simplifying the relationship between these different bodies.
From what has taken place, I understand that the Department of National Defence, as a government department, is making decisions in regard to military requirements, as a result of which certain contracts are then made by other agencies. These agencies may be the Department of Defence Production, acting as a department, or the Canadian Commercial Corporation or Defence Construction Limited, both of which corporations come under the same minister. The thing which I find it difficult to understand is why, with the immensely wide powers conferred upon the Department of Defence Production, it is necessary to have the Canadian Commercial Corporation at all. Secondly, why, if it is necessary to have the Canadian Commercial Corporation, it is necessary also to have Defence Production Limited, in view of the extremely wide powers that are conferred and would be extended by this amendment.


Clarence Decatur Howe: It is not essential, but it is desirable we think. In the last war we had a similar corporation which was called War Supplies Limited. War Supplies Limited handled all contracts made by the United States government or other governments with the Canadian government. These contracts were processed by the old department of munitions and supply. It is much easier for a foreign government to do business with a corporation having offices in the country than it is to do business between governments. The latter is more cumbersome. War Supplies Limited had an office in Washington, and I think the Washington office handled $2 million or $3 million worth of United States orders that were carried out in Canada. It also had an office in London.
The Canadian Commercial Corporation has offices in Washington, London and several offices across Canada. Instead of winding up this corporation, which we could have done, we have made it responsible for booking foreign orders and for handling foreign business. Those are pretty well its duties today. They have been whittled down to that, but it is still handling very large orders and is performing a useful function. The staff of the department has largely been transferred over into one of the production departments or into the general purchasing departments of defence production.


James MacKerras Macdonnell: I observe it is almost six o'clock, but I am going to suggest that I believe it would help us in considering this complicated and rather perplexing problem if we could have a fist of the staff of each of the organizations we have been talking about this afternoon. When I say a "list", I am not concerned with having every name but I do want to have a convenient list showing how many engineers, accountants and what-not are available, so we shall get an idea of how much talent there is, and how it is divided.


George James McIlraith: Perhaps I could answer the question about personnel right now. There seems to be a little misconception about the bill. The staff of the corporation in March of this year was some 660. I do not know what it is today but if it is not down in the neighbourhood of 40 it will be down to that in a matter of a few weeks. Perhaps that will give an effective picture as well as anything.


James MacKerras Macdonnell: I meant
something more than that. I meant the Canadian Commercial Corporation, defence production, defence construction-of course, when you come to national defence, I realize

one must limit it there. I suppose we should have whatever is the relevant unit there, the engineering unit or whatever it is.


Clarence Decatur Howe: I am trying to be reasonable, but we are discussing a corporation that has a personnel of about 40. My hon. friend wants to bring in a list of the personnel of the Department of Defence Production that probably has a staff of 1,200. Let us keep the proportion. If the committee wishes to discuss the estimates of the department, we shall be glad to give you the names and talents of each man. I do not know who is an engineer, and who is a lawyer, but I do not think it is pertinent to this particular bill. I am quite willing to show the relationship of this corporation to anything the hon. member likes, but I am not prepared to discuss the Department of Defence Production as a whole on this bill.


James MacKerras Macdonnell: Could I just make this point. After all, it is true we are now considering an amendment to the Canadian Commercial Corporation Act, but nevertheless it brings in very directly the Department of Defence Production because the Minister of Defence Production is going to exercise some powers under this act. It may be, evidently it is the case, that the Canadian Commercial Corporation has become very much smaller, and in one sense the minister may say we are trying to get all the detail we can. It seems to me it is a perfectly natural thing for us to ask these questions because I do not see how we can properly consider a smaller and shrunken Canadian Commercial Corporation unless we know why it is shrunken and what is the cause of its present situation, and I hope the minister will take that view. It seems to me this is a convenient time to do it. It is a thing that might very naturally happen here. I do not see why it should not happen here as well as elsewhere. The same questions will be asked and answered by the same people.


Clarence Decatur Howe: I will ask the chairman to think over the ruling. If he can think of any reason why I should explain the Department of Defence Production on this bill I shall be very pleased to do it at the next sitting.


James MacKerras Macdonnell: I have great confidence in the chairman. I hope he will think of a good reason.
Section stands.
Progress reported.
Business of the House BUSINESS OF THE HOUSE


Alphonse Fournier: Tomorrow we will take up third reading of Bill No. 79, respecting Indians. Then we will go into committee of ways and means and continue the consideration of the budget resolutions.


Gordon Knapman Fraser: As separate items?


Alphonse Fournier: Well, we are nearly through with the customs resolutions, and the income tax resolutions will come next. After these resolutions have carried we will take up the Canadian Commercial Corporation bill. That will be the first item after the resolutions. Then we will take up Bill No. 198, to amend the Customs Act, and then Bills No. 191 and No. 192.


George Alexander Drew: Mr. Speaker, while it may be an extension of the practice that has developed in regard to announcing business for the following day, I do think that for obvious reasons, at this stage of the session, it might be helpful if the business of the second day could also be indicated, because with the number of committees that are being arranged for, many hon. members will be called upon to be present at those meetings.


Lionel Chevrier: Why not all week?


George Alexander Drew: In response to the statement made by the minister I must say that that would be extremely helpful, and I believe the business of this house would be proceeded with in a much more orderly manner if it could be so arranged, but I am dealing only with Friday at the moment.


Lionel Chevrier: Apart from today, the business of the house has not moved very expeditiously.


Alphonse Fournier: I would be ready to lay out a program for a week's work but I would not succeed in having any work done during the week. Last week we did not get through one single item, although I had announced a whole lot of things.
On Friday, if the hon. member for Greenwood would be with us, and would be interested, I would suggest to the Prime Minister that we take up the resolution in regard to the Torquay agreement, and that it be sent to the banking and commerce committee. That would be an interesting subject, and I would be ready to bring the matter up on Friday. Perhaps we could then take up the estimates of labour and of some other department.

Business of the House Mr. Macdonnell (Greenwood):	I would
think even more highly of the minister if he could put it on, on Monday.


Alphonse Fournier: I will have to revert to estimates on Friday. If the Minister of Labour is here I would ask him to proceed with his estimates. He has been on for a

whole day and I suppose we would make some progress. If I can get the Minister of Justice also we would proceed with estimates on Friday.


[Stage Direction]
It being five minutes after six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, May 17, 1951